For Release: October 23, 1998

Contact: Andy McLeod 222-2771

Bob Ballou 222-4700 ext. 4420 (pager: 221-0002)

PROVIDENCE - The Department of Environmental Management today issued a Notice of Violation to the American Shipyard Corporation for a series of hazardous waste violations at the Corporation's facility at One Washington Street, Newport.

The action, undertaken pursuant to DEM's delegated authority under the federal Resource Conservation and Recovery Act (RCRA), includes eleven compliance orders and a $65,965 fine.

"One week ago, I said that I would get to the bottom of the matter of American Shipyard and bring DEM's investigation to a close," said DEM Director Andy McLeod. "This penalty reflects the significance of the violations. However, it is important to recognize that the problems at the shipyard did not pose an imminent threat to public health or the environment. If such a threat had existed, DEM inspectors would have initiated an immediate emergency clean-up," said McLeod.

The violations stem from three inspections of American Shipyard conducted by DEM in May and August 1997, and March 1998. In addition, McLeod last week ordered a fourth inspection, which was conducted on Monday, October 19. The company notified DEM that as of August of this year, the waste containers stored outside the facility had been removed. DEM's most recent visit to the site confirmed that the containers had indeed been removed from the facility.

The violations involve failure to meet statutory and regulatory requirements relating to the proper labeling, storage, and management of hazardous waste at the facility. The violations do not pertain to situations that posed imminent environmental or public health threats.

American Shipyard Corporation was the owner and operator of the facility on the dates of the violations alleged in the notice. After its reorganization in bankruptcy court, American Shipyard continued to be the owner and operator of the facility. Under the U.S. Bankruptcy Code, penalties owed to DEM are nondischargeable in bankruptcy proceedings. Accordingly, the penalties assessed in the notice are not affected by American Shipyard's bankruptcy.

As prescribed by law, American Shipyard may request a hearing on the violation notice, provided that such a request is made within ten days.

On October 15 of this year, a request was made by Director McLeod to have the Attorney General's Office investigate DEM's handling of the American Shipyard case. That investigation is underway. Also on October 15, Governor Almond issued a directive to open the file for review by media representatives in order to make full public disclosure of the inspection reports.

"At the direction of Governor Almond, I have also enacted a series of administrative reforms and personnel reallocations that will improve hazardous waste enforcement within DEM and ensure that matters like the American Shipyard case will be handled more expeditiously in the future," McLeod said. These include:

• A reallocation of personnel within DEM, including significant added staff resources to focus on the American Shipyard case and other RCRA enforcement matters, effectuated on October 21.
• An expedited hiring process to fill the three new positions added to the RCRA enforcement program by Governor Almond in September.